Govt looks to raise ₹7,000 cr from stake sale in New India Assurance

MUMBAI: State-owned general insurance company New India Assurance Co Ltd (NIA) on Wednesday filed the prospectus forits initial public offering(IPO).

The share sale will see a total stake dilution of 14.56%, according to the draft red herring prospectus (DRHP) available on the website of one of the investment banks managing the share sale.

A DRHP, or draft share-sale document, provides information about a company, its business and promoters, how it intends to use the proceeds of an IPO, and the potential risks it faces.

NIA has hired Kotak Mahindra Capital Co Ltd, Axis Capital Ltd, IDFC Bank Ltd, Nomura Financial Advisory and Securities( India) Pvt Ltd and YES Securities( India) Ltd to manage the public offering.

The Centre will sell 96 million shares in the offering, while the firm will issue 24 million new shares to raise primary capital.

The Centre is likely to raise ₹7,000 crore from the stake sale, two people aware of the plans said, requesting anonymity. The overall size of the issue is expected to be around to ₹10,000 cr ore. NI A plans to use the capital raised to augment its capital base to support growth of its business and maintain solvency levels.

According to its draft papers, NIA has issued 27.10 million policies across all its product segments as of June 30. Its gross written premium expanded at a compounded annual growth rate of 15.18% from ₹13,200 crore in 2012-13 to ₹23,230 crore in 2016-17.